Lately, we've been hearing a lot about how the national debt is approaching the $13 trillion dollar mark. But one accountant who’s been studying the federal deficit and national debt for nearly 20 years says $13 trillion is just a fraction of our real national debt, which is closer to $74 trillion.
According to InvestorWords.com, “National Debt” is defined as “the sum of all previously incurred annual federal deficits. Since the deficits are financed by government borrowing, national debt is equal to all government debt outstanding.” But according to Sheila Weinberg, CEO and founder of the Institute for Truth in Accounting, in order to accurately calculate the nation’s debt load, unfunded liabilities such as Medicare, Medicaid, veterans’ benefits, etc., must be figured in.
Weinberg said when the government cites the national debt as “only” $13 trillion, it's a bogus number. “The big programs, Social Security and Medicare, they’re eating a huge part of the debt. Ask your readers if they believe the government owes them Social Security and Medicare benefits. If they do, then the real number is actually $74 trillion.”
Weinberg said the government doesn’t consider that they “owe” Social Security and Medicare benefits beyond the checks they’ve already written. In fact, in the U.S. Treasury’s 2008-2009 “Notes to the Financial Statements” report, it specifies in Section R (Social Insurance):
“A liability for social insurance programs (Social Security, Medicare, Railroad Retirement, Black Lung, and Unemployment) is recognized for any unpaid amounts currently due as of the reporting date. No liability is recognized for future benefit payments not yet due.” (emphasis ours)
But out of control spending is only one factor contributing to the skyrocketing national debt, Weinberg said. Revenues have dropped more than the government projected, which made it the worst possible time to go on a spending spree, with big-ticket programs like TARP and the American Recovery and Reinvestment Act (the so-called “stimulus”). “If it were you and me, and our salaries had been cut, we would probably cut some of our other costs,” said Weinberg. “But the government seems to go the opposite way and say we need to spend more because we have less coming in.”
While people are starting to wake up and demand cuts in the size of government, Weinberg said most don’t realize how painful those cuts are going to have to be, in order to make a dent in the national debt. “People are saying ‘we need to be fiscally responsible, but don’t cut defense, don’t cut Social Security, don’t cut Medicare.’ Well, if you don’t cut those, you’re not going to be fiscally responsible.”
She doesn’t hold out much hope of those tough decisions being made any time soon, and by not making those painful cuts, the United States could be following the same path that has put many European nations on the brink of economic catastrophe. “There’s no political will, in Washington or the citizens, to make it so we do not become Greece. With our current trajectory, we will wind up like Greece.”